Philippines rekindles economy, unwinds one of world's longest lockdowns

Joel Guinto, ABS-CBN News

Posted at Jun 01 2020 06:00 AM

PNP trainees line up at the turnstile of LRT-2 Recto station minutes before a simulation exercise on May 26, 2020. George Calvelo, ABS-CBN News

MANILA -- The Philippines on Monday attempted to resuscitate its economy from one of the world's longest coronavirus lockdowns as restrictions eased further, allowing limited resumption of work and public transportation.

The nearly 80-day quarantine shut the capital region that is home to a tenth of the country's 100 million people and accounts for a third of gross domestic product. The economy shrank in the first quarter, the first in 22 years and some 2.6 million jobs were temporarily or permanently lost, officials said.

Metro Manila and other areas shifted to a General Community Quarantine (GCQ), which would allow commercial aviation, train and bus services to resume with strict physical distancing and disinfection protocols.

Giant shopping malls reopened weeks earlier with temperature screening, physical distancing marshals and floor markings to guide shoppers. Dining in restaurants is discouraged.

"We know that the war against the pandemic is not over yet," Bangko Sentral ng Pilipinas Governor Benjamin Diokno said. "All necessary monetary actions" will be deployed to ensure stability, he said.

During the lockdown, Diokno slashed 100 basis points off the benchmark interest rate, cut 200 basis points from the reserve ration requirement or RRR for banks, and authorized the purchase of P300 billion in government securities.

"We assure that the Duterte administration is working round the clock, mostly to protect people’s health and to provide a roadmap for rapid recovery," Finance Secretary Carlos Dominguez said.

JUMP START 

The shift to GCQ from an Enhanced Community Quarantine (ECQ) will help jumpstart the economy and encourage consumers to resume spending, business groups said.

The economy shrank by 0.2 percent in the quarter ended March and the government revised its full-year forecast to a contraction of 2 to 3.4 percent. Among Southeast Asian peers, Singapore and Thailand both sank into a recession or two consecutive quarters of negative growth.

"I think it’s a step towards the right direction. I think we’ll have an economic recovery that we’re all trying to do," said Management Association of the Philippines President Francis Lim.

"National discipline" should kick in to observe health protocols and avoid a fresh wave of infections, he said. The Philippines tallied 15,588 COVID-19 cases as of May 29, with 921 deaths and 3,598 recoveries.

"Demand will only happen when there is confidence and the opportunity to spend," said Financial Executives of the Philippines President Jeng Pascual.

MILLIONS JOBLESS

Some 2.6 million Filipinos lost their jobs temporarily or permanently, Labor Secretary Silvestre Bello III told a Senate hearing. The losses could swell to 10 million, he said in a reply to Sen. Ralph Recto in a Senate hearing. 

Worldwide, 1 in 6 young people lost their jobs due to the pandemic, the International Labor Organization (ILO) said.

"If we do not take significant and immediate action to improve their situation, the legacy of the virus could be with us for decades," the ILO said.

The country's largest fast-food operator, Jollibee, reported a first quarter net loss of P1.8 billion, underscoring how the lockdown kept millions indoors for over 2 months. Petron Corp said it lost P4.9 billion.

RECOVERY ROADMAP

President Rodrigo Duterte's economic team has prepared a 5-point recovery plan that includes hiring contact tracers "en masse," reviving his "Build, Build, Build" infrastructure program, and pushing for a reduction in corporate income tax to 25 percent from 30 percent.

Senate Majority Leader Juan Miguel Zubiri, a COVID-19 survivor, sought to extend the life of the country's pandemic response law by 3 months, which would allow the President to reallocate the budget for crisis spending.

Senate President Tito Sotto filed a separate stimulus measure, saying the economy should be saved from "collapse." A similar bill is pending in the House, he said.

"Lawmakers need to work fast in giving back life to our economy... Measures to help revive businesses adversely affected by the COVID-19 crisis should be enacted with haste to prevent the economy from total collapse," Sotto said.